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A Monopoly Producing a Chip at a Marginal Cost of $6

Question 138

Multiple Choice

A monopoly producing a chip at a marginal cost of $6 per unit faces a demand elasticity of −2.5.Which price should it charge to optimize its profits?

A) $6 per unit
B) $8 per unit
C) $10 per unit
D) $12 per unit

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